Kickstarter and Blockchain – What’s the Problem?
There’s been a lot of fuss in the board game world over the last couple of months. Kickstarter – the crowdfunding platform that a huge number of board games are funded through – announced that they are moving to a blockchain protocol. It led to lots of uproar and social media anger, with backers & publishers alike announcing that they were quitting the platform.
For more people, however, it just left them with a lot of questions.
- Is this a bad move?
- What does it mean for Kickstarter?
- Why should I care?
- What the hell’s a blockchain?
I’m not pretending to be an expert, but here’s my take on the news, what it means for Kickstarter, what it means for you, and why you should (or shouldn’t) care.
What is blockchain?
Let’s start with this first, as it’s what underpins everything I’m talking about here. Blockchain is essentially a digital ledger of transactions. Think of it like a collection of receipts. Rather than one person owning and controlling that ledger, every single machine connected to the blockchain’s network has an exact copy of the ledger. Every time a transaction takes place, it’s encrypted (normally) and then added to the end of every copy of the ledger. It means that no one person can ever change the transactions, or the values, because no one person controls it. It’s de-centralised.
Some cryptocurrencies are built on blockchain technology. You’ve probably heard of Bitcoin, and maybe others like Ethereum. The way some of these work is by rewarding the computers on the blockchain’s network, for doing the astronomical numbers of calculations it needs. The rewards come in the form of some of the currency itself, and it’s known as mining. The thing is, all of this processing takes power – a lot of power. In fact, it’s a massive environmental concern.
Bitcoin, the world’s biggest cryptocurrency, uses 122.87 Terawatt-hours of electricity every year. Put into context, that’s more than Argentina or Sweden use in a year. And remember, that’s just one form of cryptocurrency. There are more than 8,000 different cryptocurrencies at the moment.
Not all of those currencies use anything like the same power that Bitcoin does, and there are differing kinds of cryptocurrency which reduce the power consumption considerably (Proof of Stake vs Proof of Work), but one thing is undeniable – more energy is being consumed than if they didn’t exist, and weren’t being used.
Given the state the world is in at the moment, you can understand why people can get upset at even the idea of cryptocurrency. Its environmental impact cannot be denied.
Why is Kickstarter going to use blockchain?
There’s the $64,000 question. Why on Earth does Kickstarter need – or even want – blockchain?
In all honesty, I have no idea. I’ve read Kickstarter’s explanation, if you can call it that, and I’m none-the-wiser. My first thought was that maybe they were revamping the way payments are made, by backers and creators alike.
As a user, whether you’re a creator or a backer, the Kickstarter experience you’re familiar with will stay the same. You won’t “see” the protocol, but you will benefit from its improvements. Backers can continue to utilize normal credit and debit cards to pledge to campaigns, and creators can continue to receive normal currency to fulfill their projects.
Okay, so in other words, my interaction with Kickstarter remains unchanged, and I won’t see any differences. Great from a user’s perspective, but it begs the question “If it doesn’t change what I do, why do it?”.
Blockchain will also open the potential to be rewarded for contributing to the systems that you use everyday
Okay, sounds like cryptomining to me, which is bad for the environment, right?
The protocol will live on Celo, a carbon-negative, public blockchain
Ooh, carbon-negative, that’s really good! Except, no, it’s not really.
That statement makes it sound like Celo doesn’t do any damage to the environment. What it actually means is that Celo still uses plenty of electricity, creating the pollution that goes hand-in-hand with that, but uses carbon offsetting. The dumbed-down explanation of that, is that Celo pay another organisation to plant trees on their behalf, while still burning through the watt-hours.
Your guess is as good as mine. Personally I think it’s a combination of jumping on a hype bandwagon they hope will make magic money, and more importantly, de-centralisation.
At the moment, the people who can use Kickstarter are limited by where they live in the world, and where their money comes from, and goes to. This page on their website shows that it’s far more limited than you might imagine. Blockchain and cryptocurrency means that it doesn’t matter where in the world you are, or even who you are, if you want to send and receive money. It’s part of the reason you see ransomware demands asking for cryptocurrency.
They quote “tools”, and “innovation like we’ve never seen before”, but don’t give examples of either. One question from their FAQ on the new protocol I found particularly interesting, because of their answer, or lack of it.
Could this open up Kickstarter to increased fraud, scams, or more bad actors like I’ve heard about in relation to crypto?
You’ll notice they didn’t at any point in the answer say ‘no’. ‘No, this cannot open up Kickstarter to increased fraud etc’.
Do publishers and backers really not like blockchain?
You better believe it. If you want to see for yourself, head over to see some of the replies to this tweet, announcing the move. We’re not just talking about unknowns spewing vitriol either. Big names in the community, including commentators, designers, and publishers are openly denouncing it, vowing to never use the platform again. People who’ve spent and raised hundreds of thousands of pounds, including people I’ve worked with.
Why doesn’t everyone just use an alternative to Kickstarter?
That’s a good question. There are other crowdfunding options out there, such as IndieGoGo and more recently, Gamefound. Gamefound especially was created with the intention of it being a space where people who make games crowdfund their ideas.
The biggest problem is that Kickstarter is so deeply ingrained in crowdfunding. It’s the de-facto platform for realising your ideas, and it guarantees the most eyes on your projects. More eyes mean more potential investors, which in turn means your idea is likely to become reality. I’ve seen tweets from smaller publishers who feel trapped, as their processes and their customers’ expectations are inherently Kickstarter now.
This article on tabletop news website Dicebreaker features comments from a load of different designers and publishers, and some of them clearly indicate just how much they feel held hostage, because of the market dominance Kickstarter has. One indie RPG studio are quoted as saying that their lifetime sales through itch.io, their own webstore, and DriveThruRPG, account for less than 10% of a single Kickstarter campaign.
For now, people are stuck between a rock and a hard place.
I hope that helps clear-up some of the questions you might have had about the whole Kickstarter Goes Crypto story. Unless they pull a U-turn and vow to listen to the people raising their concerns, I’ve a feeling we’ll be hearing about this for a long time to come. Even if they did have a change of heart now, for many, the damage is done, and any trust is gone.
It puts people like me in a tricky spot too. A lot of the previews I write are for smaller studios looking to make a mark, and they could be facing some very difficult choices. From my own moral standpoint, I think it’s a bad idea. There is no obvious way this benefits any of the users, and Kickstarter haven’t been able to provide a single, concrete example of what will actually be better in their post-crypto Brave New World. Do I stop writing previews for Kickstarter campaigns, because I’m opposed to the platform’s direction? Or do I continue to support smaller designers and publishers, whose games I enjoy and believe in, because I want to see them gain the exposure I think they deserve?
Let’s wait and see what the next few months bring.
You might have noticed I’ve avoided one thing like the plague in this post. Non-fungible tokens, or NFTs. I’m not going into it now, it’s something for another post entirely, but the NFT hype machine is built on the foundations of blockchain. Will Kickstarter look to encourage campaign owners the option to offer NFT rewards? In for a penny, in for a pound…
Disclaimer: I am not an expert on blockchain or cryptocurrency. I’ve tried to present the facts as I understand them, and hopefully explain things in an easy-to-digest manner. If you notice anything factually inaccurate, please contact me so that I can correct it.